Out of the money
option has an unfavorable strike price with respect to the market price
Expiry date
When the option is no longer running
in the money
when the strike price is favorable with respect to the market price
Call option
grants the buyer the right to buy the specified stock at the strike price
put option
grants the buyer the right to sell the specified stock at the strike price
intrinsic value
difference between the current price of the underlying stock and the exercise price
Closing purchase transaction
canceling an existing short position by buying an option of the same strike price and expiry date
Closing sale transaction
canceling an existing long position by writing an option of the same strike price and expiry date
Index options
option contracts where the underlying security is the value of a specified index
Interest rate options
options on treasury notes, bill, and bonds